Unvested Token Supply

Definition ∞ Unvested token supply refers to digital assets that have been allocated but are not yet freely transferable or usable by their recipients. This portion of a cryptocurrency’s total supply is subject to a vesting schedule, meaning it is locked and released gradually over a predetermined period or upon meeting specific conditions. Such mechanisms are commonly used to align the long-term incentives of team members, advisors, or early investors with the project’s success. It helps prevent immediate selling pressure and promotes sustained commitment to the ecosystem.
Context ∞ Understanding the unvested token supply is crucial for assessing the potential future selling pressure and long-term economic stability of a digital asset. Analysts closely monitor vesting schedules and unlock events, as large releases of tokens can significantly impact market prices. News frequently reports on upcoming vesting cliff dates or token unlock events, providing important context for market participants evaluating an asset’s supply dynamics and potential volatility.